Chiarella Worked at a Company That Printed Financial Documents

question 183

Multiple Choice

Chiarella worked at a company that printed financial documents. In one documents, he read confidential information that allowed him to buy stock and make a nice profit because of his knowledge. When sued by the SEC for insider trading, the Supreme Court found Chiarella:

• A) guilty of violating Rule 10(b)-5 because he failed in his duty to disclose relevant information
• B) guilty of violating Rule 10(b)-5 because he traded in securities based on inside information
• C) guilty of violating Section 16(b) because he engaged in short-swing trading for profit
• D) not guilty of insider trading because he had no fiduciary duty not to use the information
• E) none of the other choices

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Definitions:

Depressed People

Individuals who are experiencing a persistent feeling of sadness, hopelessness, and a lack of interest or pleasure in activities.

External Circumstances

Conditions or factors that occur outside of an individual and can affect one's decisions or actions.

Psychiatrist

A medical doctor specializing in the diagnosis, treatment, and prevention of mental health and emotional disorders, capable of prescribing medication.

Clinical Psychologist

A professional specializing in diagnosing and treating mental illness, emotional disturbances, and abnormal behavior.